Share application money in cash was held outside section 28(iv) and not taxable as revenue income.

Outstanding share application money retained as a liability could not be taxed as business income under section 28(iv) because that provision covers only a benefit or perquisite arising from business or profession and does not extend to cash receipts. The amount was not a trading advance, and the rule taxing write-off of trading advances did not apply to share application money, which is capital in character. On the facts, the record did not support treatment of the outstanding balance as revenue income, so the addition was unsustainable and its deletion was upheld.

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Issues: Whether outstanding share application money could be brought to tax as business income under section 28(iv) of the Income-tax Act, 1961, and whether it could be characterised as a revenue receipt on the facts of the case.

Analysis: The share application money had been received in cash in earlier years and continued to be reflected as a liability in the balance sheet. Section 28(iv) applies to the value of any benefit or perquisite arising from business or profession, but it does not extend to benefits received in cash. The receipt was not in the nature of a trading advance given in the course of business, and the principle applicable to trading advances becoming taxable on write-off did not apply to share application money, which is a capital receipt. The material on record did not justify treating the outstanding amount as revenue income.

Conclusion: The addition under section 28(iv) was unsustainable, and the deletion of the addition was upheld.

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